New York Will Probably Restart Review Process on Fracking

Andrew Cuomo, a 54-year-old Democrat who has been mentioned as a potential presidential candidate in 2016, has been under pressure from energy companies and some localities to allow drilling to encourage the type of economic development seen in fracking states from Wyoming to
Pennsylvania. Photographer: Matthew Staver/Bloomberg

Oct. 1 (Bloomberg) -- New York will probably miss a
deadline to develop fracking regulations, requiring the state to
begin all over again and delaying indefinitely a decision on
whether to allow the natural-gas drilling, officials said.

Governor Andrew Cuomo’s administration has until Nov. 29 to
decide if it will allow hydraulic fracturing and to develop
regulations. Missing the deadline would require the state to
draft new rules and reopen a window for public comment.

On Sept. 20, Department of Environmental Conservation
Commissioner Joseph Martens said a final decision on allowing
fracking would be delayed to allow a review by Health
Commissioner Nirav Shah. In a telephone interview today, Martens
said it’s not clear how long that will take.

“We are working with the Department of Health right now on
questions like the scope of the health review, and we haven’t
made any decisions on whether or not we’ll meet the deadline for
the regulations,” Martens said today. “If we complete the
process, we’ll finalize the regulations. It really depends on
the timetable for the health review.”

In an earlier e-mailed statement, Emily DeSantis, a DEC
spokeswoman, said it’s probable that the health review will
cause the state to miss the Nov. 29 deadline.

Under Pressure

New York has been studying fracking for more than four
years and issued a moratorium in 2010. Cuomo, a 54-year-old
Democrat who has been mentioned as a potential presidential
candidate in 2016, has been under pressure from energy companies
and some localities to allow drilling to encourage the type of
economic development seen in fracking states from Wyoming to
Pennsylvania. About 80,000 messages were sent to the DEC during
the last comment period as environmental groups staged protests.

It may already be too late for New York to cash in on the
boom that led natural-gas companies to spend $20 billion on
leases, drilling rigs and royalty payments in Pennsylvania from
2008 to 2010, and the $5 billion in additional economic output
that Ohio is forecast to get by 2014.

Since New York began developing gas-drilling rules in July
2008, natural-gas prices have plunged by about 80 percent.
Talisman Energy Inc., a Calgary-based company that has about
250,000 acres under lease in New York, has said it’s unlikely to
be an active driller in the state until prices rebound.

Marcellus Shale

Fracking, in which millions of gallons of chemically
treated water and sand are forced underground to break up shale
and free trapped gas, has been blamed for damaging water
sources. The federal Environmental Protection Agency is studying
the effects on drinking water.

New York sits on the northern edge of the Marcellus Shale,
which may contain 490 trillion cubic feet of gas, enough to
supply the U.S. for two decades, according to Terry Engelder,
professor of geosciences at Pennsylvania State University in
University Park. The U.S. Energy Department said the formation
may hold 141 trillion cubic feet, enough to meet U.S. demand for
about six years.

Fracking already has been banned in more than 20 New York
towns, according to Karen Edelstein, a geographic information-systems consultant in Ithaca. Anschutz Exploration Corp. and
Cooperstown Holstein Corp., a dairy farm, have appealed
decisions by New York judges that upheld two bans on oil and gas
drilling.

Cuomo has said local governments should maintain the right
to block drilling.